Seeking to achieve the objectives of obtaining a market determined price of spectrum through a transparent process and ensure efficient use of airwaves, the Department of Telecom is set to launch auction for 2G spectrum in the 1800 MHz band on Monday.
There are five telecom companies—Bharti Airtel, Idea Cellular Ltd, Vodafone South Ltd, Videocon Telecommunications Ltd and Telewings Communications Services Private Ltd—that will be putting in their bids during the auction.
Telewings Communications is the newly formed Indian telecom joint venture that Norway’s Telenor has inked with Lakshdeep Investments and Finance. Telenor had ended its telecom JV under the brand Uninor with Unitech.
The auction for 2G spectrum comes in the wake of Supreme Court cancelling 122 telecom licences issued after January 10, 2008 by former Minister A Raja.
These included Uninor's 22 licences, 21 each of Loop Telecom and Sistema Shyam, Idea Cellular including Spice Communications (13), Videocon (21), Etisalat DB (15), S-Tel (6) and Tata Teleservices (3 CDMA licences).
Instead of auctioning the entire spectrum freed from cancellation of licences, the govt is auctioning a maximum of 11 blocks of airwaves in each circle, barring Delhi and Mumbai where there are only eight blocks, to attract higher prices. The Supreme Court had allowed the companies, whose licences were cancelled, to get spectrum reallocated for continuing their business if they win rights for the airwaves frequencies in the auction.
The government has fixed starting price for spectrum in the auction at `14,000 crore for 5 Mhz of GSM spectrum on pan-India level. This is nearly seven times more than the telcos had paid from 2001 to 2008.
While telcos like Idea Cellular, Videocon and Telewings have to win at least 5 Mhz of spectrum, divided in blocks of 1.25 Mhz each, to continue their services in areas where their licences were cancelled, Airtel and Vodafone can bid for upto two blocks in a circle.